Does Money Really Buy Elections? (Ep. 57)

Mitt Romney won big in New Hampshire, but his opponents are vowing to push on in South Carolina. Which means stepping up their pleas for cash. In an e-mail to supporters, Rick Santorum wrote:

We must show real progress tonight and redouble our efforts … That’s why my campaign launched the “Game On” Moneybomb, and why we need your help right now. As you already know, we are facing serious and well-funded opposition for the nomination.

That’s the kind of language that confirms one of the biggest truisms in politics: money buys elections.

But how true is that truism?

That’s the question Kai Ryssdal and I tackle in our latest Marketplace podcast. (Download/subscribe at iTunes, get the RSS feed, listen live via the media player above, or read the transcript.)

In a paper that tried to isolate the effect of spending in campaigns, here’s what Steve Levitt found:

LEVITT: When a candidate doubled their spending, holding everything else constant, they only got an extra one percent of the popular vote. It’s the same if you cut your spending in half, you only lose one percent of the popular vote. So we’re talking about really large swings in campaign spending with almost trivial changes in the vote.

What Levitt’s study suggests is that money doesn’t necessarily cause a candidate to win — but, rather, that the kind of candidate who’s attractive to voters also ends up attracting a lot of money. So winning an election and raising money do go together, just as rain and umbrellas go together. But umbrellas don’t cause the rain. And it doesn’t seem as if money really causes  electoral victories either, at least not nearly to the extent that the conventional wisdom says. For every well-funded candidate who seems to confirm that money buys elections (paging Michael Bloomberg), you can find counterexamples like Meg Whitman, Linda McMahon, Steve Forbes, and Tom Golisano.

And take a look at the Iowa caucuses last week. Rick Perry was the top spender, buying $4.3 million worth of ads — which got him only 10 percent of the vote. Santorum, meanwhile, spent only $30,000 on ads (the least of any candidate) and practically tied Romney — who spent  $1.5 million this time around on Iowa ads, versus $10 million in 2008.

In this podcast, you’ll also hear from one former big-spending presidential candidate who’s now convinced that money isn’t what matters most: Rudy Giuliani.

GIULIANI: I tell candidates, it’s always better to be the candidate with the most money, but you can win without it.

Here’s where you can listen to Marketplace on a station near you.

Eric M. Jones.

Of course! What other possible explanation could account for two terms of George Bush, and the current crop of Republicans scurrying for the top spot?


Does money buy elections? Ok, maybe that's inconclusive. How about policy? Does money buy that? That seems like the more relevant question.


The study in question seems to be done on Cognressional elections, furthermore on elections for the House of Representatives. You are applying those results to a national election. The differences between the two types of elections in terms of media and communication with voters could have a signficant effect on the usefulness of money in an election.


Can we say that money is necessary but not sufficient? Spending a lot will not guarantee and election win, but spending a only little (e.g. people love you and give lots of money to your campaign, but you just give that money to charity) will very likely prevent you from being elected.


I think that is a fabulous idea. Canidates raise money and instead of spending it telling what great people they are they simply go out and be great people by helping charities out.

oh and I agree with that other thing you said.

Marcus Lynn

Money matters more than 1% of the vote the study claims. The biggest impact of money is scaring off quality opponents. This is why most incumbents in Congress rarely face a serious challenge--but when their seat cones open we often see a rather competitive race. Money helps INCUMBENTS enormously.


What about the Super PAC phenomenon? Candidates no longer have to moderate their message because someone else can do the dirty work. It's been speculated that's one of the reasons Rick Perry got so little out of the money he spent in Iowa, all his declared advertising ("Rick Perry approves this message") was positive, while he didn't have the Super PAC to throw the mud (the way Mitt Romney may or may not have). Sounds like a nice Phd dissertation for some Poly Sci grad student

Marcus Lynn

Also...Regression analysis is vulnerable to missing data issues. Also it only takes 2-3 rich but stupid candidates to weaken the statistical findings.

b goldstein

I have a ton of questions about this article:

The 1% number, does it mean candidate a goes up from 49.4% to 50.4% or A goes to 49.9% and B goest to 50.1%

Is this true in primaries of multiple candidates -- whereas if there are seven candidates splitting the votea 1% is more significant.

Does this apply throughout the candidacy or is there a point which is more important (i.e. making the candidate a household name)?

If I raise 1k and my opponant raises 128k does that mean that he will be 7% higher (statistically)?


You are truly fascinating and clever guys, but sometimes it seems like you try too hard to come up with novel or counterintuitive results and in the process fly right past obvious facts. In this case, in making their claim that fundraising ability is not a significant factor in winning elections, Dubner/Levitt completely ignore the initial "Invisible Primary" phase of the campaign when election day is still far off and would-be candidates need to convince donors to give them money so they can mount a campaign in the first place. No money, no campaign, no electoral victory -- how's that for a causal model? And unless you think those early donors are representative of the voting public as a whole, what does that say about our democratic process? (I also agree with many of the points already made by previous commenters.)


You can't get elected if nobody knows who you are. Money buys ad time which gets name recognition. That's where the significance of money is most important, and the threshold of spending on the national stage is very very high. Without money, a no-name candidate has almost no chance of getting elected.

Brian Dirk

Could it be said that Fundraising for the primaries is a sort of prediction market for the early elections? Obviously the later elections are swayed by the results of earlier elections - who would vote for someone who hasn't won or got close on earlier elections? But it would be interesting to hear if these fundraisers work like a prediction market.


I thought this was well-known. How much money is spent is not as important as how much money is raised and the source of that money. It makes sense that a candidate able to raise a lot of money from smaller donations from lots of people is a good indicator that candidate will get a lot of votes.


Mr. Dubner,
You fall to some of the common fallacies I generally entrust you to spot.
1) Primaries are not elections. Mobilizing primary voters is an entirely different task compared with mobilizing a general electorate. In recent history, about 95% of congressional ELECTION winners outspent their opponents - and 2-3% of the upsets see a small difference on dollars spent by both sides.
I don't believe there has been a significant study on the effect of primary spending in presidential races in recent history. And as Craig pointed out before me, your statistics are representative of House races. But if we want to apply a general principle, primary voters are generally consistent voters (i.e. they turn out every year), are at generally somewhat supportive of each of the primary candidates, but holds stronger views than the average citizen. The general electorate has independents and opposition party voters that can be swayed. Money is needed to reach out to these potential voters. Primary voters seek out information themselves, so spending is less effective.

2) Your coauthor's statistic seems extremely flawed.
a) Percentage of the popular vote does not account for voter turnout. But the more one spends, generally, there greater the voter turnout is. That is the true measure of the efficacy of spending (save shooting the moon by driving up voter turnout by the opposition (with inflammatory ads/views or other poor decisions).
b) Candidate spending is like an arms race - the more one spends, the more his opponent will. Why? High spending elections are generally hotly contested elections (why spend the money if you're going to win anyway? You can always save it for later). Both candidates high spending results in high voter turnout on BOTH sides, and thus a smaller margin of victory (voter share).
c) There is a well documented phenomenon of diminishing returns in campaign spending (i.e. the more you spend, the less effect it has). Should a campaign cut their spending in half, it by no means would result in a reciprocal loss of voter share.

3) Your observation that attractive candidates also attract donations is true, but you are missing a key element: campaign donations are often seen as an investment. You are investing in the candidates victory. But investments have risks - in this case the candidate losing. If you see that your candidate has already raised lots of money, it is a safer investment (with less return, as always). If your candidate is not fundraising well, it is seen as a risk, like investing in a less competitive company (one that seems doomed in the near future will see a sell off). So large donations can buy an election by making the opposition appear to be a losing investment to the many smaller potential opposition donors, making competition unlikely if not impossible.

There is a reason that campaign spending has proliferated so much in the past few decades. It works! The correlation may not prove 100% causation, but it certainly suggests a significant amount, more than I believe you give credit for.

Mr. Ryssdal, your convictions are accurate. Best of luck in the world after Market



The neat thing about the paper is that Levitt controlled for opponent spending when he crunched the numbers. (though I've no idea how he got enough data to do this). Turns out it's not really an arms race and the bang you get for your buck isn't changed by how much money your opponent is blowing through.


Let's say I have a local election where both candidates only have $5,000 each to spend on ads. A major donor decides he needs something from government here, so he donates $40,000 to the campaign. By your equation of "doubling campaign dollars equals +1% vote," and I'm assuming that each 1% gained for one candidate is a 1% loss for an opponent, you've just gained a six point swing in a favorable direction. And if you're trying to start a major business here, you may have just won an election for your guy with kickbacks on the way.


Hard to argue with Levitt's article. The big shocker is that his sample of rematch elections is representative of all congressional elections. I'd have thought that the only candidates willing to try again after losing to the same person from last election would be who don't know when to hang up their hat. But looks like they're just like any other politician.

One caveat to keep in mind for anybody reading this who thinks they can make a successful bid for a house seat on $50. The paper may say that an extra $100 grand only gets you somewhere between 0.1% and 1.0%, but you still need a nice bank roll for these numbers apply to you.

John Mulholland

I think it would be fascinating to look at how the Utah Caucus system makes money much less relevant, especially as we have removed several incumbents.

John Mulholland

It might also be interesting to study the correlation of media attention with campaign success. For example in 08 Leno broke the strike before a primary and featured Huckabee.

Steve Rosen

In Nov. 2011, I won a Board of Ed seat beating a well known name in my community despite being outspent 6-1.

So, to answer your question, I say; "No, money does not really buy elections."